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New Studies on Return on Investment for Health Information Technology Adoption. the MidSouth eHealth Alliance Project 27-September, 2007 Mark Frisse Rodney Holmes & Colleagues. Questions we ask. How do you define value (“return”) qualitatively?

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new studies on return on investment for health information technology adoption

New Studies on Return on Investment for Health Information Technology Adoption

the MidSouth eHealth Alliance Project

27-September, 2007

Mark Frisse

Rodney Holmes

& Colleagues

questions we ask
Questions we ask
  • How do you define value (“return”) qualitatively?
  • How do you define cost (“investment”) qualitatively?
  • From what perspective are your definitions derived?
    • individual / family
    • provider
    • payer (and intermediaries)
    • the public good
  • What is the domain of measurement?
    • a technology?
    • a system of care?
  • How well can we measure cost and return?
  • How much trouble should we take to perform these measurements?
  • To what extent does “ROI” really guide decision-making for HIT?
my positions questions
My positions / questions
  • If we don’t define the problem correctly, we’ll get the wrong answer
    • example: CPOE - must be at least the med administration cycle
    • example: eRx - definition should be prescriber-dispenser unit
    • example: health information exchanges - not “stand-alone”
  • Sustainability is the question, but it is the system - not any specific component, that is should be modeled
    • Are hospitals sustainable?
    • Is Medicare sustainable?
    • Are health plans (and medical inflation) sustainable?
    • the whole can be greater than its parts
  • Are established intermediaries really sustainable?
    • or did they simply get there first?
    • are they merely holding on the the money and control?
the midsouth ehealth alliance a 501 c 3 corporation
Baptist Memorial Health Care Corp. (4 facilities)

Christ Community Health (4 primary care clinics)

Methodist Healthcare (7 facilities including Le Bonheur Children’s Medical Center)

The Regional Medical Center (The MED)

Saint Francis Hospital & St. Francis Bartlett (Tenet Healthcare)

St. Jude Children’s Research Hospital

Shelby County/Health Loop Clinics (11 primary care clinics)

UT Medical Group (300+ clinicians)

Memphis Managed Care/TLC (MCO)

The MidSouth eHealth Alliance – a 501(c)(3) corporation

Broad Participation

initial emphasis hospitals and large clinics
Initial emphasis: hospitals and large clinics


  • Minimized barriers to entry; maximize control
    • less than $50,000 per year per hospital or large clinic
    • take what data can be easily shared
    • data under publishers control until used by another institution
    • do the mappings and transformations centrally
  • Stay highly focused on immediate value to founders
    • emergency departments
    • hospitalists
    • medical homes, transitions
    • no population health initially, no “report cards,” no P4P
  • Use controlled by governance and formal data-sharing agreements
regional snapshot after one year of operation
Regional snapshot after one year of operation
  • Total # of records: 989,629
  • Total # of patients: 810,000
  • Monthly Encounter Data: 110,000
  • Monthly ICD-9 admission codes (Chief complaints): 34,000
  • Monthly "Reason For Visit" messages in text: 110,000
  • Monthly ICD-9 Discharge codes: 370,000
  • Monthly labs: 2,400,000
  • Monthly white blood counts (9 hospitals): 51,975
  • Monthly microbiology reports (May, 2007): 25,709
  • Monthly chest x-ray reports: 34,996
a day in memphis
A day in Memphis
  • Records: 33,000 per day
  • Encounter data: 3,700 per day
  • ICD-9 admission chief complaints: 1,000 per day
  • "Reason For Visit" text: 3,700 per day
  • ICD-9 discharge codes: 12,000 per day
  • Procedure codes: 200 per day
  • White blood counts: 1,799 per day
  • Microbiology reports: 850 per day
  • Chest x-ray reports: 1,200 per day
  • Laboratory values: 80,000 per day
the system is heavily used
The system is heavily used

Over 250 users

  • ED Staff including clinicians, registrars, and unit secretaries
  • Recently - hospitalists
  • Future - adjacent states, ambulatory settings
  • Between 70 and 95 percent of registered users used the system last month
  • Since May, 2006, 900,000 encounters; more than 80,000 lab tests per day

Our goal is 100% use

  • Records are currently sought on about 40% of ED visitors
  • For these visitors between 30 and 60% have information from other sites

Anecdotally, our system affects care

  • Impact on patients with chest pain
  • Avoidance of CTs and MRIs
  • Avoidance of admissions
data and access
Data and access
  • Data available today
    • Patient identification/demographics
    • Lab results
    • Encounter data: date of service, physician and reason
    • Dictated Reports
      • Imaging studies
      • Cardiology studies
      • Discharge summaries
      • Operative reports
      • Emergency room summaries
      • History and Physicals
      • Diagnostic Codes
      • Some medication history (TennCare Claims)
      • Etc.
  • Data to be available in the future
    • Medication history
    • Allergies
privacy and confidentiality are central
Privacy and confidentiality are central


  • are allowed the use of the data for designated purpose of treatment and diagnosis only.
  • signed a Registration Agreement that designates them as a Data Provider and/or a Data Recipient.
  • signed a Data Sharing Agreement.
  • have a vote on the policy committee known as the Operations Committee

Patients :

  • are notified that their clinical data could be shared with the MidSouth eHealth Alliance..
  • have the right to “Opt Out” of the system. It is assumed they are in the system until they “Opt Out”.


high frequency of repeat visits
High frequency of repeat visits





ed care as primary care
ED care as primary care

This individual had over 40 ED visits to multiple emergency departments within a 7-month periods. Options:- more effective treatment in ED- more effective care outside of ED

we are updating the model developed in the 2004 plan
We are updating the model developed in the 2004 plan






Core healthcare entities include: Baptist Memphis, Le Bonheur Children’s Hospital, Methodist University Hospital, The Regional Medical Center (The MED), Saint Francis Hospital, St. Jude Children’s Research Hospital, Shelby County/Health Loop, UTMG, LabCorp, Memphis Managed Care-TLC

npv 2007 model 4 2 million
NPV (2007 model) - $4.2 Million

The State of Tennessee and the Core Healthcare Entities realize a higher financial gain when you consider the different stakeholder contributions.

State of Tennessee

Payback Period = 1.7

Return on Investment = 1.95

Core Healthcare Entities

Payback Period = 0.5

Return on Investment = 17.5


  • Based on data obtained on the core healthcare entities and Memphis Managed Care
  • Benefits are estimated from a conservative review of the published literature
  • Deployment schedule is limited initially to EDs; years four and five will extend to additional healthcare providers
  • Inflation and volumes remain constant
  • The costs to move and support the RHIO data center are not included in the five-year forecasts
  • The RHIO support desk infrastructure is minimal an embedded in the development team and local management
  • The average cost for a core healthcare entity for implementation and operation activities is $30,000 per year.
  • Net Financial Benefit ($ Million)
  • Net Present Value


Payback Period (years) = 3.3

Project Return on Investment = .56

other areas of near term potential
Communication of results

The HealthBridge & Regenstrief models

Prescription medication “hub”

Collaborative Care Services

Lower cost of care across selected facilities (ED, HealthLoop, & Christ Community)

Lower cost of communication of clinicians

Expand data communicated to clinician

Case management improvement

Public Health Report Services

Lower cost to deliver reportable data sets or public health data.

Employer Benefits Reporting Services

Lower utilization review costs

P4P/Quality Indicators Reporting Services

Pilot studies with Plans & Employers (report cards, P4P/Quality Indicators, patient/disease specific, disease management)

Other areas of near-term potential